Title Insurance with Short Sale

[CSL1919]

Originally Posted by Rakin

Sounds like you are covered, I'd verify you are the main insured along with your lender.

Thanks for your input. I'd check that out.

As you had pointed out, it is not esily understandable for the seller to pay for the title insurance for the buyer. This is why I feel little bit uncomfortable although I might have been covered.

[rjrcm]

Originally Posted by CSL1919

Thanks for your input. I'd check that out.

As you had pointed out, it is not esily understandable for the seller to pay for the title insurance for the buyer. This is why I feel little bit uncomfortable although I might have been covered.

Not really sure why you are concerned. In our contract, the seller pays for the buyer's insurance. It's negotiable who pays for the lenders insurance, although it's usually the buyer. I suggest discussing this with the title company. They can explain how you are covered and who payed for it.

In a short sale where the seller usually does not have money to cover closing costs, either the seller's bank will cover the costs or the buyer will be asked to cover costs.

[2bindenver]

Look for the HUD-1 form - it lists all costs paid - look for the title section. Read the costs listed.

There should be two policies listed - on from the seller to you and the other from you to the lender along with endorsements.

[CSL1919]

Thanks again. Here, sellers look like paying title insurance for buyers in short sale. It is not easy to figure all them out for average joe like myself.

[Lake Conroe resident]

Originally Posted by CSL1919

The seller did not pay closing cost but I did. I have recieved a copy of document

Originally Posted by CSL1919

named "COMMITMENT FOR TITLE INSURANCE" which is composed with section A and section B. I believe this is a title insurance. My name and my lender are listed on this copy.

What you received was a title commitment, not to be confused with title insurance. What the title co sent you was a commitment from their examiners telling you about the certain exclusions/requirements mentioned in that commitment letter, there was more than likely a section "C" and "D" as well. Section C would be of the most concern to me as that will be the place you would see who has all the leins on the property.

I would have never purchased the property without one considering it was a short. Being that the old owners did not pay their mortgage probably meant they did not pay anyone else either. What happens later when someone comes knocking saying they have a lien on the house for some unpaid work such as a pool, remodel work, landscaping etc?..

Theres an easy way to tell if you have a policy or not; simply look at your HUD statement (final closing statment) If you have a policy there will be a spot on there showing the charge from the title co, either that or you can simply contact the title co and ask them whether you have coverage or not.

To get insurance after the fact is kind of like closing the barn door after all the animals have run out. What happens if they tell you they will cover it with the exclusion of lien X, Y & Z, and the encroachment along the West property line?
It's kind of like getting auto insurance after you have been in a wreck; the insurance company will not cover the previous damage.

[DMenscha]

Originally Posted by CSL1919

Lender is involved. It looks like they got title insurance for the amount of their investment.

Well ... it looks like that typically the seller does not purchase title insurance for the buyer. I've asked to the title company several times if I will not have any title issues, and heard that its possibility is ZERO since the seller paid insurance fee for me.

There can be 2 title insurance policies issued in a real estate transaction. The OWNERS policy insures that the seller had the legal right to transfer title to you. A LENDERS policy insures a mortgage lender that their loan is going to not be clouded by any title defects.

If the seller paid title insurance, it would have been an OWNERS policy in favor of you and you should have received a copy of it in escrow. If you paid cash, you wouldn't have had a lenders policy issued.

This would be in CA, your mileage may vary.

[dubyanumberone]

Originally Posted by CSL1919

The seller did not pay closing cost but I did. I have recieved a copy of document
named "COMMITMENT FOR TITLE INSURANCE" which is composed with section A and section B. I believe this is a title insurance. My name and my lender are listed on this copy.

Then the seller purchased an "Owner's" policy which will insure that you have clear title. You confirm, you can make a quick call to the title company that closed the transaction for you.